Grupo Traxión, S.A.B. de C.V.

Greetings. Welcome to Traxion fourth quarter 2020 earnings call results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Abhi Lischain, our executive president and co-founder. Thank you. You may begin.

Thank you. Welcome again to Tracción Earnings Call. I hope you and your families are safe and healthy. As usual, I will comment on some relevant aspects of the quarter before handing over to Rodolfo Wolf Antonio, who will discuss operating and financial figures in detail. For the third year in a row, Tracción posted impressive results. Despite the pandemic, the company achieved record high financial and operating figures. We faced the contingency with a defensive position and the results were positive. I am very proud to share with you that in October, TRACCION joined the United Nations Global Compact. It made a very significant step towards ESG and the implementation of the best practices in terms of sustainability. It was the most challenging year, but also the best in our history. tested our business model resiliency, the execution capabilities of our management team, and the flexibility of our commercial Moscow. As you know, Tracción launched an asset-light division in 2020, focused to capture the growth of logistic services. The company was very well positioned to capture the growth that came with the contingency, as people were forced to use e-commerce. We basically tripled our exposure to logistic channels related to it. This boost in electronic sales encouraged a faster development of the logistic infrastructure needed to support an appropriate penetration of e-commerce and Traccion took advantage of that. Moreover, through Traccion Logistics, our technology-driven platform, we became the supply chain manager of several clients, and our focus is to continue to be for many more of them in the near future. Moving on, Tracción surpassed its guidance figures once again over a very complex macro environment. The company reached 14.3 billion pesos in revenues, 3 billion pesos in EBITDA, and 661 million pesos of net income. What I think is more relevant here is to compare these figures to those of 2017 when we became public. We basically doubled our revenues in three years, with an impressive growth in EBITDA of 140%, a 330 basis point expansion in margin, and a 97 growth in net income. Additionally, operating cash flow grew 17.5 times. These are truly remarkable figures, especially given current conditions. Shifting gears, our cargo operations maintain a healthy level. We have to shift our fleet continuously among sectors and geographies to satisfy demand. Logistics recorded significant growth as well, mainly driven by e-commerce activity that boosted our last mile business, which registered a growth of almost 300% in the fourth quarter. and by an expansion of 25%, which is more than 105,000 square meters of 3PL warehouse space, which resulted from increased demand. In these business lines, we are preparing an investment plan to reinforce our operating infrastructure, especially in the last mile segment, which is the one showing more dynamic growth. In terms of personal transportation, as you know, we started facing increased demand mainly due to social distancing measures. And we have to shift the fleet that is normally dedicated to schools to serve these clients. Such demand surpassed this capability and we needed to outsource approximately 500 buses from other players. As of today, we continue to face over demand. We are constantly in touch with our clients to know their expectations and improve the profitability of such fleet outsourcing. Finally, in terms of guidance and due to the global macro landscape, we are planning a growth of approximately 10% in both revenues and EBITDA and maintain our margins. We expect to deploy approximately 2 billion pesos of CAPEX. mainly for fleet renovations, growth initiatives with both existing and new clients in the personal transportation segment that got delayed by the contingency, and by investments in technology to reinforce the asset-light division. With this, I conclude my remarks, and I will hand over to Rodolfo. Please, Rodolfo, go ahead.

Thank you, Avi. Good morning, everyone. Thanks for your attendance. I will now discuss the most important operating and commercial highlights of the quarter. In the personal transportation segment, we started operating 250 new buses during the last three months as a result of an active pipeline and some initiatives that were reactivated after being deferred at the beginning of the contingency. Moreover, our level of service is reported to be above 97% in this business. mainly due to technologies implemented during the pandemic for a better control management. In the cargo segment, we started freight operations of natural gas. It was the kickoff of the first stage of a multi-annual contract. We also continued to grow in the refrigerated service as well. Furthermore, we executed a joint venture with a multimodal logistic operator. to strengthen our exposure in the intermodal service. In the logistic arena, as you know, we basically triple our exposure to e-commerce. Traccion, with his last mile subsidiary, Redpack, which was acquired in 2018, was very well positioned to seize opportunities and expansions, especially from e-commerce. In this segment, we expanded the fleet by 10% in this quarter to face increased demand. And we continue adding new clients, both domestic and foreign, to our base. It is important to highlight that we consider that approximately 70% of revenues of Red Pack are directly linked to e-commerce. We expanded our 3PL logistics space by more than 85,000 square meters to reach 535,000 in total. as a result of an aggressive commercial strategy that resulted in an increase of both existing and new clients. We further enhance handling volumes in some of our operations in optimized spaces, which improves our margins. Shifting gears, Traction Logistics, our logistic platform, ended his first year of operation with better than expected results. which proves our value creation capabilities throughout this technology-driven logistics solution platform. Our asset-light approach toward logistics services is starting to pay off, and we expect to continue to see positive outcomes from this business over the long run. As you all know, it wasn't a typical year. However, we achieved our goals with a different mix and throughout enormous effort of our team. with all our business lines showing improvements both operationally and financially. Having said this, I will now hand it over to Wolf. Please, Wolf, go ahead.